Stocks Advance as Small Caps Outperform, Treasury Yields Retreat

The Dow Jones Industrial Average gained 0.5% on Tuesday, but small cap stocks like the Russell 2000 outperformed with a 1.1% rise.

Long-term interest rates fell sharply, with the 10-year Treasury yield dropping 14 basis points to 4.65%, supporting stock gains.

Volume rose on both the Nasdaq and NYSE compared to Monday, a positive sign of institutional buying. Market breadth improved.

Within the Dow, Visa, JPMorgan Chase and Walmart were relative outperformers. Defense stocks like Booz Allen Hamilton and Kratos Defense rallied.

The Nasdaq's follow-through day on Oct. 6 was an early indicator the market may have bottomed. Another positive sign.